Resumen de costes

Our results suggest that the fertility crisis in East Germany was the combined result of a postponement of first birth and a decline in higher-order births among East German women. These fertility changes are systematically related to changes in the East German labor market. Most importantly, as wages started to reflect market prices policies in East Germany before unification. For the evolution of household income in East and West Germany, see Figure C.7 in the Appendix.

for human capital, young women faced high potential returns to education and work experience after unification. As expected, these changes encourage career investments at the expense of early childbearing. These changes occurred despite the excellent infrastructure of childcare, outmigration to West Germany or abroad or changes in family policies and financial support. As such, the evidence supports the idea that work incentives in the labor market have an important influence on childbearing decisions.

Appendix C

C.0.1

Figures and Tables

Fig. C.1 Mean Age at First Birth in East and West Germany

Fig. C.2 Mean Age at Higher-order Births in East and West Germany

Source: German Aministrative Pension Data.

Fig. C.3 Share of Women without Children in 2008 by Cohort

Notes: The Micro Census in 2008 reports the total number of children ever born. East Germany refers here to current residence in East Germany.

Fig. C.4 Unemployment Rates in East and West Germany between 1980 and 2000

Source: Social security records (SIAB).

Fig. C.5 Average Wage Growth in East Germany between 1989 and 2000

Fig. C.6 Kernel Density Estimates of Monthly Real Wages using Different Imputation Techniques

Notes: The figure shows kernel density estimates of actual and imputed monthly real wages for East German women. The imputation methods are: exploiting the panel structure to assign wages (wahegr_imp_adj3), using a control function approach (wagegr_imp_con), using a matching approach (wagegr_imp_mah) and using median restrictions (wagegr_imp_med).

Fig. C.7 Evolution of Household Income in East and West Germany

Notes: The figure shows data on net monthly household income from 1990 to 2005 and an alternative calculation of net household income as the sum of labor earnings, public transfers and other income (e.g.rental income or other capital income).

Table C.1 TFR and Tempo-Adjusted TFR in Germany East Germany West Germany TFR Adj. TFR TFR Adj. TFR 1980-1985 1.82 1.83 1.37 1.62 1986-1990 1.53 1.91 1.4 1.5 1991-1995 0.87 - 1.39 1.5 1996-2000 1.06 1.51 1.41 1.55 2001-2005 1.26 1.57 1.38 1.62

Notes: The table reports the total fertility rate, i.e. the sum of age- specific fertility rates in each year for women between age 18 and 45. The adjusted fertility rate employs the method by Bongaarts and Feenstra (1998) to adjust for tempo effects using the birth order and age of the mother. Adjusted TFR in East Germany between 1986 and 1990 are based on the years 1986-1988, the adjusted TFR for 1996- 2000 are available for 1997-2000 only.

C.0.2

Fertility Histories

The data for fertility histories before and after German unification come from the German Pension Fund (FDZ-RV), the so-called VSKT 2007. It is the most comprehensive data source for individual fertility and employment biographies in Germany. In particular, it covers full fertility and employment records for a 0.25% sample of all actively insured and not yet retired individuals who have at least one pension-relevant spell by the end of 2007.

Since employment in the private and public sector is subject to mandatory pension contributions, the vast majority of the German population has at least one record in the pension data. Additional pension-relevant spells include certain self-employed professions (e.g. artists), periods of long-term illness covered by health insurance and periods of care for an elderly person or children under the age of three.

The reliability of these administrative records is very high. Prior to be used for calculating pension payments, the account has to be authorized by the individual concerned. A person can voluntarily authorize her pension account at any time. For individuals aged 30 or older, the pension fund actively requests the authorization of pension accounts. As a consequence, the data for 2007 are most reliable for cohorts born until 1977, which are 30 years or older in 2007. The data contain a relatively high share of non-authorized accounts for cohorts born after 1977. Since authorized accounts tend to underreport births, we restrict the analysis to cohorts born between 1940 and 1977.

The data contain the birth dates of children ever born until 2007 by the respective birth cohorts. The total fertility rate we calculate based on these data slightly underestimates the actual fertility rate because children born to civil servants or women not in the pension system in 2007 (because of death or prior pension receipt) are not recorded. Prior evidence suggests that the data miss only about 5% of births. Hence, we think that the bias is small, especially compared to other survey data (see Kreyenfeld, 2006a).1

The pension data thus provide the most comprehensive data on fertility histories in Germany.

Children are almost always recorded in the mother’s pension record. Only about 0.04% of children are recorded in the father’s pension record, mostly when the father is widowed (see also Kreyenfeld, 2006a). In the authorization process, the existence of children recorded are verified by birth certificates.

1_{The comparison refers to completed pension records (‘vollendete Versichertenkonten’). Alternatively,}

we could simply compare our TFR estimates with the official estimates by the Federal Statistical Office.

The pension data, like other administrative data sources, only record the current residence in 2007. Current residence in 2007, however, does not account for East German women who moved to West Germany and vice versa. To define women of East German origin, we proceed as follows: we know the region of origin of all women with an employment spell prior to unification. For all other women, we rely on the employment history from the social security records that has been merged to the pension data. We use the region of the first recorded employment spell after unification to identify a woman from West or East Germany. For the remaining missings, we use the place of residence in 2007 to assign East and West German origin. Any measurement error from this procedure will be stronger for the youngest cohorts because they might not have had an employment spell. We return to the issue of East-West migration in the robustness section.

For our analysis, we distinguish between unskilled women, women with a vocational training degree and women with tertiary education. The pension data report educational attainment only for the employment spell that is recorded in 2007. To fill in missing values, we use the same strategy as for the region of origin above. Based on the full employment histories from the social security records between 1975 and 2007, we assign the educational information available there. Based on this additional information, we are able to reduce missings on formal education to 9.8% for East German and 16.4% for West German women. Most of the missings in East Germany are for older women who completed their fertility history prior to unification, and hence, should have little effect on our results.